Redmonds Enterprise, Inc. v. CSX Transportation, Inc.

United States District Court, D. Maryland

July 27, 2018

REDMONDS ENTERPRISE, INC.v.CSX TRANSPORTATION, INC.

MEMORANDUM

Catherine C. Blake United States District Judge

Plaintiff
Redmonds Enterprise, Inc. ("Redmonds") filed a
state-court action, subsequently removed to this court,
alleging that defendant CSX Transportation, Inc.
("CSX") is liable for defamation, injurious
falsehood, and tortious interference with economic advantage
or business relationships under Maryland law. Now pending are
two motions to withdraw as attorney filed by Redmonds'
local counsel (ECF Nos. 33 and 37), a motion for summary
judgment from CSX (ECF No. 34), a motion for sanctions
against the plaintiffs counsel from CSX (ECF No. 36), a
motion to amend the complaint from Redmonds (ECF No. 44), and
a motion to deem admitted certain requests for admission
("discovery motion") (ECF No. 50). The motions have
been fully briefed, and no hearing is necessary to their
resolution. See Local Rule 105.6. For the reasons
discussed below, the motions to withdraw and for summary
judgment will be granted. The motions to amend the complaint
and for sanctions will be denied. The discovery motion will
be denied as moot.

BACKGROUND

The
full facts surrounding this case are described in the
court's previous memorandum regarding the motion to
dismiss. (See May 30, 2017 Memo, at 1-3 (ECF No.
20).) In summary, this case arises from a vandalism incident
at CSX's railyard in Jessup, Maryland in October 2015 and
the subsequent attempts to identify the culprit. Prior to the
incident, Redmonds had subcontracted with automobile
transportation companies at the railyard, notably Moore
Transportation and United Road. After the vandalism incident,
Redmonds experienced a significant decline in business with
these two main customers. Redmonds allegedly was informed
that this decline was due to an email sent from Rick Orner, a
purported CSX employee, informing the transportation
companies that Redmonds would be banned from the railyard due
to "habitually vandalizing cars" (the "Orner
email") (Compl. ¶ 21). Based on this information,
Redmonds then filed a lawsuit against CSX in the Circuit
Court for Anne Arundel County, Maryland on September 28,
2016, claiming defamation, injurious falsehood, and tortious
interference with economic advantage or business
relationships based on the statements made in the alleged
email. (See Civil Cover Sheet, ECF No. 2; Compl.)
CSX removed the action to this court on December 8, 2016.
(Notice of Removal, ECF No. 1.) CSX subsequently filed a
motion to dismiss, which was denied on May 30, 2017. (May 30,
2017 Order, ECF No. 21.)

Discovery
closed on December 4, 2017. (Oct. 10, 2017 Order, ECF No.
26.) Neither party has produced the specific email underlying
Redmonds' claims. (See Mot. Summ. J. ¶ 2;
Memo. Supp. Mot. Amend at 5, ECF No. 41.) Nor has Redmonds
produced evidence that Orner is a CSX employee as alleged in
the complaint. Accordingly, in an email declining
Redmonds' request to amend the complaint to add
additional parties on November 21, 2017, CSX requested that
Redmonds dismiss the case. (Mot. Sanctions Ex. H at 3, ECF
No. 36-10.) CSX received no response to this request. On
December 18, 2017, CSX sent Redmonds a letter reiterating
this request and including a copy of its motion for sanctions
in accordance with Fed.R.Civ.P. 11(c)(2).[1] Redmonds declined
to dismiss its complaint the following day. (Mot. Sanctions
Ex. B at 2, ECF No. 36-4.) CSX filed a motion for summary
judgment on January 9, 2018, and the motion for sanctions on
January 11, 2018. Redmonds' local counsel, Sheryl Wood,
filed a motion to withdraw on January 9, 2018, and again on
January 19, 2018.

Redmonds
filed its opposition to the motion for sanctions on January
24, 2018. In response to the motion for summary judgment,
Redmonds filed a motion to amend its complaint and a
memorandum supporting its motion and opposing CSX's
motion for summary judgment on January 31,
2018.[2] Redmonds seeks to base its amended
complaint on a Major Damage Report completed by CSX employee
Rashida Bridwell and allegedly sent to Moore Transportation
on November 11, 2015. (See First Am. Compl.
¶¶ 3-4, ECF No. 44-1; Memo. Supp. Mot. Amend at 8,
ECF No. 46.) Ms. Bridwell's comments on the report read:

Moore Transport Trucker Damage: unit found in bay with
multiple deep scratches on the hood, right rear door and
quarter panel. Scratches on the hood consists [sic] of words
that are hand carved. Video footage was reviewed and
conclusive evidence was found that Moore Transport driver
vandalized the unit. The driver has been permanently banned
by TDSI Director Phillip Peay. Video footage has been saved
to ECM.

(Ex. 9, Memo. Supp. Mot. Amend at 2, ECF No. 46-9). Redmonds
alleges that the phrase "conclusive evidence was found
that Moore Transport driver vandalized the unit" is
objectively false, and thus supports its claims for
defamation, injurious falsehood, and tortious interference in
place of the nonexistent email. (See generally
Red-lined First Am. Compl., ECF No. 46-2; Memo. Supp. Mot.
Amend at 14.) Redmonds further alleges that this
communication is part of a larger conspiracy to
"scapegoat" Redmonds for damage by an unknown,
unidentified party at the railyard. (Memo. Supp. Mot. Amend
at 7-10.) Redmonds requested a deposition of Ms. Bridwell and
other individuals on November 26, 2017, six business days
before the close of discovery. (Ex. B, Mem. Opp. Mot. Amend
at 3-4.) She was not available for deposition prior to the
close of discovery on December 4, 2017, as her last day with
CSX was December 1, 2017. (Id. at 1.)

CSX
filed its opposition to Ms. Wood's motion to withdraw on
February 2 (ECF No. 45), its reply regarding the motion for
sanctions on February 8 (ECF No. 47), and its opposition to
the motion to amend on February 14, 2018 (ECF No. 48). Ms.
Wood filed her reply regarding her motion to withdraw on
February 16, 2018. (ECF No. 49). CSX filed a motion to deem
admitted certain requests for admissions on February 20,
2018, to which no response has been filed.

ANALYSIS

I.
Motion to Amend/Correct the Complaint

Redmonds
seeks to amend to identify a communication from CSX employee
Rashida Bridwell as the basis for its suit, rather than the
nonexistent email from Mr. Orner. Leave to amend must be
freely granted under Rule 15(a), and amendments are generally
accepted absent futility or undue prejudice. See Foman v.
Davis,371 U.S. 178, 182 (1962); Matrix Capital
Mgmt. Fund, LP v. BearingPoint, Inc.,576 F.3d 172, 193
(4th Cir. 2009) ("[L]eave to amend should be denied only
when the amendment would be prejudicial to the opposing
party, there has been bad faith on the part of the moving
party, or amendment would be futile.").[3] Modifications to
a scheduling order, however, are governed by Rule 16(b),
which states that "[a] schedule may be modified only for
good cause and with the judge's consent."
Fed.R.Civ.P. 16(b)(4). The good cause standard "focuses
on the tardiness of the amendment and the reasons for its
tardy submission... a movant must demonstrate that the
reasons for the tardiness of his motion justify a departure
from the rules set by the court in its scheduling
order." Rassoull v. Maximus, Inc., 209 F.R.D.
372, 374 (D. Md. 2002); see also Odyssey Travel Center,
Inc. v. RO Cruises, Inc.,262 F.Supp.2d 618, 632 (D.Md.
2003) (denying motion to amend complaint to correct the
defendant when motion was filed only after the
defendant's motion for summary judgment, despite earlier
notice of the correct defendant).

While
these two rules sometimes are in tension, in this instance
both point toward a denial of Redmonds' motion to amend.
Redmonds has demonstrated neither good cause for modification
of the scheduling order, nor absence of prejudice to the
opposing party. First, the scheduling order set the deadline
for amendment of pleadings on July 24, 2017. The documents
upon which Redmonds now intends to rely were produced in the
late summer or fall of 2017. (See Memo. Supp. Mot.
Amend at 12; Ex. A, Resp. Opp. Mot. Amend at 2, ECF No.
48-1.) Nonetheless, Redmonds did not move to modify the
scheduling order to permit amendment of its pleadings. Even
if such a motion is assumed within Redmonds' motion to
amend, that motion was not filed until January 31, 2018, over
five months after Redmonds had obtained these documents.
Redmonds argues that owing to its limited financial
resources, it could not authenticate CSX's documents
until CSX responded to Redmonds' requests for admissions
on January 10, 2018. Redmonds could have filed its requests
for admissions prior to the December 11, 2017, deadline,
however, if amending its complaint truly depended upon the
documents' authentication.[4] Further, Redmonds requested to
depose Ms. Bridwell on November 26, 2017, six business days
prior to the close of discovery. Redmonds presumably was
contemplating using the Major Damage Report as a basis for
its claims at least as early as that request, and could have
moved to amend its complaint that much sooner.

Setting
aside the tardiness of the amendment, permitting the
amendment would be prejudicial to CSX, and so should be
barred under Rule 15(a). Redmonds did not move to amend its
pleading until over a month after close of discovery. Thus,
CSX did not have notice of the new basis for Redmonds'
claims at any point during the discovery period. Redmonds
argues that because CSX produced the documents, it would have
no need to conduct additional discovery regarding them. This
is not correct. Delay in identifying the documents that would
support Redmonds' claim prevented CSX from deposing or
otherwise conducting discovery with any of the
newly-implicated individuals. Most importantly, CSX was
unable to depose or otherwise conduct discovery surrounding
Rashida Bridwell, the author of the statement that Redmonds
now claims was made with malice. She is no longer employed by
the company, so it is unclear whether she would be available
if discovery were to be re-opened. To permit amendment after
the opportunity has passed for discovery on the basis of Ms.
Bridwell's comment on the Major Damage Report would
prejudice CSX.

Finally,
it appears the amendment would be futile for several reasons.
First, a statement that "conclusive" evidence was
found regarding a single incidence of vandalism in a Major
Damage Report is very different from an allegation of
"habitual vandalism" in an e-mail sent to all
current and potential clients, especially for the purposes of
injurious falsehood and tortious interference claims. Second,
characterizing the evidence in the video as
"conclusive" is merely the opinion of the author.
Objectively, the video did provide evidence used to determine
who committed the vandalism. Ms. Bridwell's statement is
not an untrue statement of fact. Third, there is no evidence
alleged suggesting malice on the part of Ms. Bridwell in
preparing the Major Damage Report. Further, it seems likely
...

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